Jeremy Hunt: I can confirm that the Government take this issue incredibly seriously—the Bailey review on the sexualisation of youth is one indication of that. We are also having a meeting with the trade body United Kingdom Internet Sites to take the issue further. We believe strongly that internet service providers need to behave in a socially responsible way and to do what they can to protect children, so we fully support what my hon. Friend said

Jim Cunningham: What is the Minister to doing to beef up the CQC? As I understand it, there have been a number of redundancies there, and if he wants to maintain the quality of care he
	has to beef it up. Does he know that the
	Coventry Evening Telegraph
	recently conducted an investigation into 10 homes in Coventry, which were found greatly wanting in their standards, hygiene and medicine distribution?

Nick Gibb: Those schools are applying because of the autonomy and independence that academy status brings to them. My hon. Friend is right to cite the figure of 1,200. By now, 704 academies have opened, compared with 200 when this Government came into office. They are delivering a very high standard of education, and I hope that the Opposition will support not only our existing academy programme but our proposal to extend the programme to primary schools and, in particular, to the 218 worst-performing primary schools.

Neil Carmichael: Is it not the case that this urgent question has certainly underlined the need for a full investigation and inquiry into the discredited system that the last Government used for the funding of
	schools, which was unfair and inefficient? Is it not ironic that this issue has been raised when schools want more autonomy from such systems. Is it not also the case that we should support—

George Young: As I said to one of my colleagues a few moments ago, there will be an opportunity after the Financial Secretary has made a statement for questions about our proposals to maintain the City of London as a thriving centre of enterprise that concentrates on serving its customers. There will an opportunity to question the Financial Secretary on the ICB’s proposals.

Mark Hoban: With permission, Mr Deputy Speaker, I should like to make a statement.
	It is now well known that the tripartite system set up by the last Government failed spectacularly in its mission to maintain stability. The decision to divide responsibility for assessing systemic financial risks between three institutions meant that, in reality, no one took responsibility. The crisis dramatically exposed that flaw and cost the taxpayer a vast amount of money. We cannot allow another crisis such as the one we have just witnessed. Shortly after taking office, this Government set in train a consultation on reforming our system of financial regulation. Today, after two extensive rounds of consultation, I am presenting to the House a White Paper, including draft legislation, setting out the blueprint for a completely new system of regulation. Let me summarise the main proposals.
	A permanent Financial Policy Committee will be established within the Bank of England. Its job will be to monitor overall risks in the financial system, to identify bubbles as they develop, to spot dangerous inter-connections and to stop excessive levels of leverage before it is too late. It has already started operating on an interim basis and is having its first formal meeting today. Subject to legislative process, the permanent body will be in place by the end of next year.
	We will abolish the Financial Services Authority in its current form and transfer its significant prudential functions to a new Prudential Regulatory Authority that will sit in the Bank of England. The Prudential Regulatory Authority will focus on microprudential regulation and will bring judgment to the vital task of regulating the soundness of individual firms that manage risk on their balance sheet, particularly banks and insurance companies. We recognise, of course, that such firms engage in very different businesses, which is why we are proposing to provide the PRA with a specific statutory objective for its insurance responsibilities.
	We are also bringing in a new approach to protecting consumers. A financial conduct authority will oversee the conduct of financial services firms, the operation of markets and the protection of consumers, with new powers to ban the sale of toxic products. I can confirm that as an integral part of its mission to secure better outcomes for consumers and investors, the authority will also have a new duty to promote competition. Judgment, discretion and proactive intervention will be the hallmark of our new regulators.
	We are bringing forward the draft Bill for pre-legislative scrutiny, for which a Joint Committee of both Houses will shortly be convened. We are seeking valuable input from Members on both sides of the House as it is in all our interests to get this right.
	Last week, we also established under Sir John Vickers an Independent Commission on Banking to resolve the debate about the structure of the banking sector in the UK. I am sure that the whole House will join me in paying tribute to Sir John and his fellow commissioners for the excellent job they are doing. The commission’s interim report made two particularly important proposals: bail-in, not bail-out, so that private investors, not taxpayers,
	bear the losses when things go wrong; and a ring fence around better capitalised high-street banks to make them safer and protect their vital services to the economy if things go wrong. I can confirm that the Government agree in principle with both proposals.
	Of course, we will await the commission’s final report, but I can tell the House that any reforms will need to meet the following principles: all banks should be allowed to fail safely without affecting vital banking services, without imposing costs on the taxpayer, through reforms that are applicable across our whole banking industry and in a manner consistent with EU and international law. I can also confirm today that we welcome the commission’s recommendations on increasing competition in retail banking and we are working closely with it to achieve this aim.
	We are also taking the first steps towards normalising the Government’s involvement in the financial sector. One legacy of the crisis is that today’s taxpayers have a direct interest in several banks through large-scale guarantees and shareholdings. We do not believe the Government should be a long-term investor in financial institutions. It will take some time—possibly several years—before we can make a complete exit from our investments in the banks, but today I can confirm the start of that process.
	On the advice of UK Financial Investments, we have decided to launch a sale process for Northern Rock. This follows extensive work over the past three months to consider potential options for returning Northern Rock to the private sector while generating the best possible taxpayer value. The sale process will be open and transparent and in line with state aid rules. I have already written to the chair of the all-party group on building societies and financial mutuals, my hon. Friend the Member for Cardiff North (Jonathan Evans), to reassure him that any interested parties can bid for it, including mutuals. This reaffirms the Government’s commitment actively to promote the mutuals sector. That does not mean that other options to return Northern Rock to the private sector have been ruled out, but I believe that at this point in time a sale process is the most promising.
	I also want to make the House aware that following an application by the Bank of England to the High Court today, Southsea Mortgage and Investment Company Ltd, a very small bank, has been placed into the bank insolvency procedure. That follows a decision by the FSA that Southsea no longer satisfied its threshold conditions for operating as a deposit taker. The Financial Services Compensation Scheme has been triggered and eligible depositors with balances up to the limit of £85,000 are safeguarded. Eligible depositors with amounts in excess of the insured limit of £85,000 may be entitled to receive a share of their savings above this limit as part of the insolvency process.
	Finally, I want to update the House on the ongoing negotiations on international financial regulation. When I was in Brussels yesterday, my message was clear. We must learn the lessons of the crisis and create the foundations for stable and sustainable economic growth without fragmenting global markets. That is why global standards are in our national interest. Much of the debate has focused on the implementation of Basel III and we have been busy making the case for implementing it in full right around the world, including here in
	Europe. Last week’s International Monetary Fund assessment supported our arguments for minimum standards here in the EU, with discretion for national authorities to increase them where necessary.
	When the coalition Government came into office, questions were being asked about the future of banking and regulation but they had not been answered. It has been our job to resolve them. Our goal should be a new settlement between our financial system and the British people; a new settlement where the banks support the people, instead of the people bailing out the banks. The statement today sets out the progress we have made towards building this new settlement and the actions we are taking to complete it and I commend the statement to the House.

Christopher Leslie: What utter contempt the Government are showing to Parliament by announcing these major proposals first to the bankers in the City yesterday and only today to elected representatives. Time and time again, Ministers give policy speeches outside this place and the House of Commons is merely an afterthought. Why is the Chancellor not here to make these announcements today?
	That total disregard for the democratic process is reflected in the draft legislation, which hands vast new powers over the lives of all our constituents to the unelected Bank of England and leaves a gaping accountability deficit, with no mention of parliamentary accountability in all its 408 pages. Why are Ministers still so sketchy about the detail of these new powers for the Bank of England, with nothing on the face of the Bill, and is it true that there may be no further clarity on the toolkit for the Financial Policy Committee until next year?
	Why is there still no clarity about the crisis management memorandum? Why have the Government not yet published the consolidated Financial Services and Markets Act 2000 draft for Parliament to see? Why is there no clarity about where consumer credit regulation will fit into this alphabet spaghetti of new quangos? Why are they still fumbling around with the composition of the Financial Policy Committee? Why have they failed to negotiate the flexibility needed from the European Union and the European banking regulators to ensure that all these new UK structures are allowed discretion to use the macro-prudential tools in the first place?
	There will be significant concern, especially in the Portsmouth area, about the news on the Southsea mortgage bank—Southsea is perhaps a name that resonates in other ways—but we will need to watch developments closely.
	Although there are clear inadequacies in the proposals published today, we will consider them carefully, and there are areas where we agree with the Government. The Chancellor is right that this was not a financial crisis made in Britain. It was caused by a failure in the banking industry in every major financial centre and a global failure in banking regulation. Families and businesses worldwide have paid a heavy price for the irresponsible actions of the banks, but Governments and regulators failed to see this coming and we in the Opposition must accept our part in that. Thankfully, however, we ignored the advice of the Chancellor, who called for lighter regulation and opposed the previous Labour Government’s decisions to step in to prevent
	financial catastrophe by nationalising Northern Rock and Royal Bank of Scotland and by cutting VAT to get the recovery moving.
	Today’s announcement vindicates the rescue measures taken by my right hon. Friends at the time and shows that taxpayers always had a good chance of recouping the lion’s share of the sums involved. But on Northern Rock, can the Minister explain the haste in the sale? We hope he is not playing politics and rushing for a fire sale when a measured approach to maximising value and diversifying the banking system would be better. Why has the Treasury failed to consider mutualising Northern Rock and is the Minister really content to see it return to business as usual as yet another plc without exploring the benefits that a new building society might bring?
	There are three tests by which the Chancellor and the Minister should be judged. First, are taxpayers and bank customers adequately protected from future bailouts by the so-called firewalls in the bank structures? How can the Chancellor say he agrees with the conclusions of the Vickers Banking Commission before it has even published its final report?
	Secondly, has the Minister secured sufficient international agreement on regulation and bank restructuring to secure a workable system protecting jobs here in Britain? Sadly, the Treasury has already shown a woeful lack of leadership internationally on pay transparency and bankers’ bonuses, which, by the way, should be taxed to pay for jobs and businesses here at home.
	Thirdly, will we end up with a banking system that delivers the goods for our economy as a whole? Are small businesses getting the bank loans they need and why is Project Merlin already unravelling with confusion between the Department for Business, Innovation and Skills and the Treasury over so-called “stretch” targets, or capacity targets, how they are going to be enforced and whether the banks are really participating wholeheartedly? We need a diverse banking system, which should include a strong mutual sector—something that was promised in the coalition agreement but that the Government seem uninterested in delivering. We need clear and comprehensible regulatory structures with far clearer lines of accountability, and we need a Government who put customers, taxpayers and the real economy first.

Peter Bone: I thought that the shadow Minister let the Government off far too lightly regarding Parliament. This place should hear new policy from the Government first. Yesterday, this was published by the BBC first and was then announced at Mansion house. I am afraid that the Government have failed on this occasion. Will the Minister please publish the media grid?

Iain Wright: Is there not an inherent contradiction in Government policy? One the one hand there is stricter ring-fencing of banks’ capital reserves, and on the other there are the Business Secretary’s proposals, via Project Merlin, for banks to lend more to small businesses. Who will win this battle of economic policy—the Chancellor or the Business Secretary?

Mark Hoban: There is no dispute between the two. It is very clear that we need banks to hold more capital and, based on the work done at Basel 3 on the implementation of the higher level of capital, that should not restrict the amount of credit available. Yes, we need to see banks deleveraging and reducing the size of their balance sheets, but that should not be at the cost of businesses in our constituencies and across the country that need capital in order to grow and expand. Banks should be reducing their lending to each other, rather than reducing the exposure to businesses in this country.

Stella Creasy: Further to that point about the powers of the Financial Conduct Authority, will the Minister clarify whether it will have oversight over the consumer credit market, particularly the high-cost credit market, which is a source of concern for many Opposition Members? Perhaps he will take the opportunity to confirm whether the FCA’s powers of intervention could include capping the total cost that lenders can charge for lending where it is detrimental to consumers so that we can deal with the toxicity of the legal loan shark market.

Andrew Robathan: I do think it is overdue. It provides the opportunity to call people up in the same way that we can use the regular forces. It also fits in well with the reserve forces review, Future Reserves 2020, which we are undertaking to ensure that this country makes proper use of the reserves. The amendments that we made this week anticipate some of the changes that may be proposed in the review and that the study is likely to recommend when is published later this year.
	When we debated the amendments earlier this week, the hon. Member for West Dunbartonshire raised a point about the Reserve Forces (Safeguard of Employment) Act 1985. She rather threw me because I was not an expert on that Act, but I have now looked up the details, so I should like to take this opportunity to respond to her point. It concerned the Cabinet Office’s red tape challenge, which is a welcome initiative to look at legislation and identify where it is no longer required. One area of legislation to be reviewed relates to employment law. I gather that on the website, under the heading, “Managing Staff”, 127 pieces of legislation are listed for review. I congratulate her on having studied this website, or perhaps on having a very assiduous researcher who has done so for her. The list includes the 1985 Act, which appears at the top of the list only because that is how the list has been ordered, not because it is a particular target for rationalisation. Of course, we carry out reviews from time to time to ensure that our existing employment legislation is appropriate, and we will continue to do so. However, I can assure her that for the foreseeable future it is absolutely our intention that the protection that this Act provides for reservists and employers will continue to remain available.

Patrick Mercer: It is always a pleasure to follow the hon. Member for Portsmouth South (Mr Hancock), who speaks so clearly on this subject. I shall be brief, but I should like to make one or two points. There can be few more solemn moments in the Chamber than when the names of the dead are read out at Prime Minister’s questions on a Wednesday. This is now happening practically every week. I therefore find it interesting that, despite the statements of support and grave interest in our armed forces, our debate on the very thing that supports them—namely, the military covenant—has been scheduled for a Thursday afternoon. There are very few Members present—disgracefully few on the Opposition Benches—and there is a larky atmosphere with people trying to get out of this place as quickly as they can. That is a discredit to the men and women who serve us, and to the subject that we are debating today.
	I am pleased to see so many hon. and gallant Members and former comrades in arms around me, however. I should like to pay tribute to the excellent speech made by my hon. and gallant Friend the Member for South West Wiltshire (Dr Murrison). It was a highly intelligent speech, but I disagree with him on one subject. He used the very moving terms “battle rhythm” and “tempo of operations” aspirationally, saying that he hoped that both of those things would decline. It is worth bearing in mind that in April, 1st Battalion The Rifles deployed to Helmand province, and that, 131 years ago, its predecessor, the 66th of Foot, also deployed to Helmand. That was exactly the same area and exactly the same regiment facing exactly the same tribesmen, and with a
	similar political backdrop. In four hours, 994 men were killed in the battle of Maiwand, which now falls within the area of responsibility of the 1st Battalion the Rifles—what a coincidence.
	I do not think that the tempo of operations or battle rhythm is going to decrease at all. As the fighting operations in Afghanistan and Pakistan decline, I have every confidence—I say this with no pleasure—that other operations will come up that will require our fighting men and women to be deployed in other parts of the world and that the military covenant will be just as important then as it is now.
	Despite my earlier rather churlish comments, I am delighted that this Government have chosen to put these measures in a place where they can be properly recognised. I think it crucial to support the morale not just of the fighting men and women but of their families by assuring them that things are being done for them. My hon. and gallant Friend the Member for Beckenham (Bob Stewart), who I know is going to speak later, used to command the Cheshire Regiment. [Interruption.] I gather that he is not going to speak later, which will be a great disadvantage to the whole House, I am sure. When he and I were serving, I know that we felt that no differentiation was made at all, as no particular support or advantage was given specifically to soldiers, sailors or airmen and their families. I thus rejoice in the fact that health care, schooling, taxation and other individual items are to be put on a more sensible basis for those who serve to protect us.
	I ask the Minister to think carefully about how the military covenant—ill defined as it necessarily and properly is—might evolve and develop, and about whether we can learn anything particularly from our American cousins.
	There is one thing that completely defeats me. As a former commanding officer, I knew that I had only one thing to hand by which I could financially advantage those under my command. In those days, it was called the commanding officer’s discretionary fund. Over the years, that fund has gone up and I understand that it is has recently been about £60 a head. Forgive me for teaching the House to suck eggs, Mr Deputy Speaker, but this is simply a fund of money given to commanding officers—be they commanding mobile bath units or a battalion of the guards—to spend as they see fit on those under their command without any further reference to higher authority. It is an extremely important fund. It has been spent recently on preparing homecoming parades; it has helped with regimental funerals; it has provided people with excellent opportunities for training; and it has allowed people to enjoy themselves a little and to get some quality time.
	Modest though it is, this discretionary fund is extremely important, yet it has been cut, which I do not understand. This fund is immediate, important and goes right to the heart of the military covenant. I appreciate that in the overall scheme of things it is not a big sum of money and I appreciate that it is not a large issue overall, but to the men and women inside the units, it is crucial. I deplore the fact that it has been cut, because that stands on its head the logic and the propriety of everything else that has been done through the military covenant.
	I will spare the House any more of my rhetoric. I am grateful for the opportunity to have made these points and I am grateful to this Government for what they
	have done. I hope to see the military covenant evolving and improving, and I have absolutely no doubt that the Minister will now think carefully about the commanding officer’s discretionary fund—and I am sure that he will restore it.

Helen Grant: In this, my first year as a Member of Parliament, it has been a revelation and a reassurance to know that so many colleagues throughout the House have served in our armed forces, and I am even more surprised and steeled by the number who continue to serve as reservists. Their front-line experience is priceless in these thorny and precarious times. I do not share their direct experience of the ways of modern warfare, but I certainly see the landscape from a different plane. I am the mother of a teenage son who is training to become a Royal Marine commando, and my constituency is home to 36 Engineer Regiment and the Queen’s Gurkha Engineers. The health and well-being of our armed forces is therefore very close to my heart.
	I do not intend to make a long speech, but I want to say a little about clause 2, about the military covenant, and, in particular, about how the covenant can help our military families. Isolation is a significant issue for military families when their loved ones are away, and in my constituency some Army mums have set up a local support group called Troopers Mums. Those inspirational women support themselves as well as the servicemen and women of whom they are so proud. They say that one of the most important factors for families dealing with isolation and worry is the existence of a support network of like-minded, empathetic people who are undergoing the same fears and anxieties. Sometimes it can be as simple as knowing, just from a look, when someone needs a cup of tea and a chat. Those women rely on each other in moments of need, and in many cases a problem shared is truly a problem halved. Troopers’ Mums are not asking for help; they simply want to be able to help themselves.
	I know from my own research that other good support groups exist, but their functioning seems to be fragmented, unconnected and sporadic. Perhaps we can explore how we might develop and support a more uniform and accessible network across the country. When I use the word “support” I do not refer to state finance, state interference or yet another layer of state bureaucracy, and I echo the sentiments of one of the mums who said that she would not want a single penny to be diverted from the front line, but I think that with Government endorsement and some sponsorship from the private sector, we could assist families in a real and tangible way by helping them to set up and operate networks of their own.
	The second point that I want to make about the military covenant concerns our nation as a whole. The covenant is a commitment between the Government, our service personnel, families and the nation. What worries me is that even if we enshrine the Government’s part of the bargain in legislation, things can still go badly wrong if our nation does not buy in. In conversation with my Troopers’ Mums, I heard of many instances in which a little kindness and understanding could have gone a long way, especially in the workplace. One mum told me that she had not been allowed time off to attend
	her son’s medal ceremony because she had already been given time off to attend his graduation some years earlier. Another told me that when her son was severely injured while serving in Afghanistan, she began to struggle at work. The response from her superiors was that she should “pull herself together”.
	Closer to home, here in Westminster, I recently attended an armed forces dinner. I sat next to a man who had served in Iraq and had been awarded the Conspicuous Gallantry Cross, which is one down from the Victoria Cross. He had also served in Afghanistan, where his gallantry had earned him the Military Cross. I asked him about his Army life, and we talked of many things. He mentioned his home on an Army base, where he lives with his wife, who will soon turn 50. They cannot close the windows properly in their house because the double glazing framework has blown out. Their kitchen is made up of badly fitting, ill-matching units which are dysfunctional and look a complete shambles. They are sometimes embarrassed to ask people to supper because of the state of their accommodation.
	Warrant Officer Mick Flynn is one of Britain’s most highly decorated soldiers. He is one of our heroes. He has given his entire working life to his country, and he is justly proud of his career. He does not complain, and he asks for little. I think that, as we debate the military covenant, the House will agree that we should support the rhetoric with practical action, such as ensuring that someone goes round to Mr and Mrs Flynn’s house to sort out their windows, fix the kitchen, and restore a little dignity to their home.

Andrew Percy: It is a pleasure to be called to contribute to this debate. I welcome the Bill’s provisions, especially the enshrining of the military covenant into law.
	I have not been able to contribute to earlier debates on the Bill, nor do I have any military service as distinguished and gallant as that of some Members who have spoken. My only experience of military service was going to Leconfield base when I was about eight or nine with my father, when he was in the Territorial Army in east Yorkshire. That is as far as my direct interaction with the military goes. However, my constituency, and east Yorkshire and north Lincolnshire in general, is
	a major recruiting ground for our military. Consequently, a number of veterans in my constituency and across the area regularly contact me on military matters, as do the families of serving personnel. This subject is of great local interest, therefore.
	The constituency also has a long and proud history of supporting our military and playing an important role in military operations. Only last week, I attended a ceremony in Goole to mark the anniversary of D-day, and the Mulberry harbour was, of course, constructed in Goole, so the military is never far from the minds of the people of Brigg and Goole. I have also been working with a number of charities in my local area, not least the National Gulf Veterans and Families Association. The Minister knows of my interest in it, as he recently met me at the Ministry of Defence to discuss its work. I know it will welcome the military covenant provisions.
	I may not have any direct military service history, but a month or so ago I spent some time with the armed forces scheme in the Falkland Islands, which was incredibly enlightening as it gave those of us without that experience the opportunity to engage with service personnel in all three branches of the military. I was staggered to hear how poorly some of them feel they are both treated and prepared for leaving the military. I was especially shocked to learn that many of them find that it is a problem for them to wear their uniform when they return to the UK. In fact, some of them highlighted that they had been verbally assaulted for wearing their uniform. That demonstrates that we have to ensure that more respect is shown to our military by the general public, and there is no better way of leading on that than by enshrining the military covenant in law.
	When talking to those soldiers, sailors and airmen in the Falklands, I was most interested by what they planned and wanted to do on leaving the military. As a former teacher who takes a close interest in educational issues, I was struck by the fact that in the past there has been insufficient support for those leaving the military, and I certainly hope the covenant will address that. I particularly welcome the Government’s announcements on independent learning funds for those in the military and greater support for those leaving the military. I hope we hear more about that in the coming months and years.
	We have heard a lot about the Joanna Lumley test. In my constituency, I apply the Mavis Vines test. She is a constituent of mine who worked for 25 years in Berlin for the British military before returning to Goole, and who now continually, and quite rightly, pressures me on the issue of how our veterans and serving personnel are treated, especially as her son has just returned from Afghanistan. One issue that she continuously presses me on—quite rightly—is housing. In 10 years as a local councillor, I saw the pressures relating to housing. We are all aware of those, but housing is never far from the minds of those who serve in our military and are transients, to say the least, when serving. Consequently, I hope that enshrining the military covenant and the annual report on the covenant in law will address some of the pressures and challenges that service personnel face.
	I needed no more evidence of how a great deal remains to be done on our treatment of our military, but I received some when a constituent came to see me a couple of weeks ago. His son is a ground crew man who
	is working as part of Operation Ellamy in Italy. My constituent informed me, against the wishes of his son, that service personnel were continuing to be served rotten food and that they had insufficient computers to make contact with their families back home. This relates back to a point made by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) about isolation. When these people are on active service overseas that isolation is not helped if there are not enough computers, mobile phones or communication routes back to their loved ones back home. Although progress has been made since this Government came to power, a great deal more clearly can and should be done to support people on active service overseas.
	I do not want to detain the House for too long, but I do want to express my support for the Bill. The Government are right to enshrine the covenant in law. I heard the words of the hon. Member for West Dunbartonshire (Gemma Doyle) and I will resist asking why these things were not done previously. The Labour Government did have a number of years in which they could have enshrined the covenant in law. I hope that we can proceed in a cross-party way on this issue. There remains much to be done to support our military, but the amendments that have been made to enshrine the covenant are the right ones. I am sure that hon. Members from all parts of this House will support the Bill, as I will, and I conclude by wishing our service personnel all the very best.

Bob Stewart: Does the hon. Gentleman honestly think that any Government Member or in this country wants to cut jobs just for the sake of it for some reason of politics? The fact is that jobs have had to go because we just cannot afford them any longer and we cannot just plough money into the public sector all the time.

Dan Jarvis: I thank the hon. Gentleman for his intervention. I do not believe that Government Members side think of these issues in such ways but this is a matter of policy. Barnsley is the kind of place that will go into a recession first and come out of it last and I believe that when the Government are making significant cuts to public services that will have an impact on jobs and livelihoods across Barnsley, they have a duty and an obligation to pause and consider the effect that those cuts will have on the people in Barnsley.
	Where public sector cuts are made and jobs in the public service are lost, I do not believe that it is a given that the private sector will come in and fill the void. That should not be a natural assumption. In order to promote the kinds of conditions that allow the private sector to invest in places such as Barnsley, there needs to be a targeted programme of investment and development. I do not believe that the policies that the Government are putting in place will do that, but I thank the hon. Gentleman, as ever, for his useful intervention.
	The LEPs, which have replaced RDAs, are short on funding and short on power. They are not even guaranteed the money for their own start-up costs, never mind for investment to support business. They will have to apply to the regional growth fund, whose first round of funding is already 10 times oversubscribed, and they have been denied access to cash from the European regional development fund, which is being centralised at the desk of a Whitehall bureaucrat. Perhaps the Minister can explain how that fits with the Government’s supposed localism agenda.
	I believe that we can and must do better than that. First, we can strengthen the LEPs and make them much better able to co-ordinate and lead a strategic approach to regional development. Among other things, that means giving them access to the ERDF and allowing them to join together to secure investment for cross-regional projects. It means giving them a stronger, more formal role in the development of local economic growth plans. It means removing or reducing the £1 million threshold for RGF bids so that smaller companies can apply and
	LEPs can work with them to bring in the investment projects needed to spur growth. Will the Minister consider these changes?

Dan Jarvis: I am grateful to the Minister for that assurance.
	One area where LEPs have real influence is the creation of enterprise zones. I commend the Government on the proposal being put forward by my local LEP, but I hope that the Government will not penalise proposals from several LEPs, including my own, for enterprise zones that are spread across several sites. The Government must be ready to listen to LEPs where there is a clear rationale based on the complexity of the local economy and the real needs of businesses. The uncertainty on this question reflects the over-simplistic and unclear nature of the criteria for enterprise zone site selection. Will the Minister ensure that those problems are rectified as a matter of urgency so that the work of LEPs such as mine is not inhibited by a lack of flexibility?
	In any case, enterprise zones are a limited tool. They can offer reduced business rates, fast planning and fast internet, but a far greater concern of entrepreneurs in Barnsley is the lack of skilled workers. I will talk about the shortcomings of the Government’s skills policy in a moment, but given that the skills problem is one of the biggest barriers to private sector growth, would it not make sense to mandate the LEPs to oversee a locally adapted skills strategy, in partnership with businesses and local authorities? At the very least, we should take up the suggestion made by the Centre for Cities that enterprise zones should include special support for training and skills development.
	For Barnsley, another vital issue, of which I know the Minister is aware, is the Government’s position on transferring the assets of the regional development agencies to LEPs or to local authorities. Those assets were built up by the RDAs with the specific aim of supporting local development, and in many cases they are critical to projects for transforming our local economies. That is the case in Barnsley, where the keystone Barnsley Markets project has been premised on the use of land belonging to the RDA. That is not some bureaucratic black hole; it is the future of Barnsley as a town—a project that is ready and waiting to move forward, and exactly the practical purpose for which the asset was originally acquired.
	In total, the future of some £500 million in RDA land and property assets throughout the country is in doubt. I firmly believe that local authorities or LEPs should be given the first say on the use of those assets, and that is not just a Labour view; it is one echoed throughout the House. I am greatly concerned that the Government may be contemplating a fire sale at reduced prices, which would bolster central coffers at the expense of regional development and be deeply short-sighted. Will
	the Minister reassure the House that this will not happen, and will he allow LEPs to use the assets as they were meant to be used?
	An active LEP is important, but it is not enough on its own, and the recent figures on bank lending bear out what I hear in person from businesses in my constituency. The problem is especially severe for small and medium-sized enterprises, exactly the sort of businesses that are most important for driving job growth. Research shows that south Yorkshire has one of the highest concentrations of SMEs with high growth potential anywhere in the UK. Keep that in mind, Madam Deputy Speaker, if anyone ever tells you that Barnsley does not have untapped potential.
	There is, however, a steady stream of reports that SMEs are being held back by the lack of credit, even when the business case is sound. I was glad to hear that the Business Secretary did not rule out more action down the line if targets continue to be missed; I was not so glad when he told me that banks miss their targets more by choice than by chance. That is not acceptable for businesses in Barnsley or anywhere else in the country.
	What plans do the Government have to ensure that banks meet their small-business lending targets? At what point do the Government take firmer action on the two state-owned banks? Would they accept the banks meeting their lending targets but failing to meet their small-business lending targets? What will Ministers do if the banks continue to claim that the demand is not there? It is a claim that many small businesses contest. Is the Minister going to wait to the end of the year to do more than lecture the banks if they are at fault? And what will happen next year if the Project Merlin agreement has not delivered? The Government have admitted that the lack of lending still threatens the entire recovery, but that problem needs to be resolved now.
	The market is the foundation of our economy, but the Government have to play a role in helping it develop in a way that matches our strengths and builds the society that we want. If Barnsley is to thrive, it must be at the cutting edge of high-tech, high-value manufacturing and of the new digital and green economies. Instead, the Government are axing the zero-carbon homes initiative, which was helping to develop the next generation of British manufacturing. What are they going to do to support the development of the new economy that we need?

Dan Jarvis: I am incredibly grateful to the hon. Gentleman for that intervention, which gives me the opportunity to remind the House—although there will be no need to remind people in Barnsley—of the impact of the policies of the Conservative Governments led by Margaret Thatcher in the 1980s. People in Barnsley will recall the damage that the Conservative Governments who were in power until 1997 did to such places. I will be very happy to walk through Barnsley with the hon. Gentleman, who is always welcome to come and visit—it is not terribly far from his constituency. I will be delighted to show him the real, long-lasting structural improvements that were made in Barnsley as a result of 13 years of Labour government. In effect, the cuts made by the Conservative Governments of the 1980s and 1990s created structural, long-lasting, generational decay in Barnsley, and that takes a significant period to overcome. I believe that the Labour Government made considerable progress during the 13 years when they were in office, and that is clear to people when they walk through the streets of Barnsley. The Building Schools for the Future programme is a classic example; it has provided state-of-the-art infrastructure for kids to get to school in Barnsley. We can be proud of that record. I am grateful to the hon. Gentleman for the opportunity to make that point.
	As I said, the Government have axed Train to Gain, which was a valuable scheme that provided a significant amount of work-based training to hundreds of thousands of people. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses, and the Minister has had to admit that adult apprentices may have to borrow £9,000 to fund their training. As Labour Members will be well aware, the Government have also cancelled the Barnsley-inspired future jobs fund, pioneered by Councillor Steve Houghton, the leader of Barnsley metropolitan borough council. I remind the House that the FJF provided jobs for 100,000 18 to 24-year-olds, with a valuable training element. Overall, I believe that those decisions represent a reckless underinvestment in the skills needed for economic regeneration and are a body blow to the aspirations of young people not just in Barnsley, but across the country.
	Barnsley stands to be particularly affected by the changes in benefits made by this Government. I fully agree that welfare needs to be reformed, but I do not believe that we are going about it in the right way. Above all, the changes do nothing directly to support new jobs. Across the country, there are five times as many claimants as there are open positions. We risk the injustice of penalising people for failing to get jobs that simply do not exist.
	There are several ways in which the reforms undermine job creation and stop people getting off benefits. The assumption that the unemployed are earning the minimum wage in the calculation for universal credit will make it virtually impossible for many people to set up a business. The new enterprise allowance cuts out anyone who has not been on jobseeker’s allowance for six months. People coming off disability allowance and people who have just been made redundant who want to set themselves up in business are being told that they have to waste six months uselessly claiming jobseeker’s allowance before they will be eligible for the new enterprise allowance. That costs taxpayers more for people who want only to stand on their own two feet. Will the Government look again at their welfare reform programme as it clearly needs improvement?
	The problems facing Barnsley are indicative of those facing towns across the country. The message seems self-evident: we can either sacrifice everything to balancing the books in a way that undermines the economic stability of the country or we can tackle these problems head-on. This is not a request for unlimited spending or an end to reform; it is just a request for the Government to do their bit so that we in Barnsley can fulfil our potential. For now, the Government’s approach is ensuring that places such as Barnsley bear a disproportionate burden. If this Government are to live up to their promises, if they are to make a claim to the basic principles of fairness, and if their cuts and reforms are to have any legitimacy with the British people, that must change.

Mark Prisk: I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate. I do not know whether this is his first Adjournment debate, given that he is a relatively new Member of the House—the second most recent if my calculations are right—but some of the language was a
	little flowery, and there was a strong desire to have a go at the Conservative Government. There seemed to be a moment of frozen time between 1997 and last year, but we will pass that by.
	I agree with the hon. Gentleman that Barnsley should share in the sustainable, long-term growth that is the overriding priority of this Government for the whole country. We want to forge a new model of growth based on rebalancing the economy both geographically and in terms of sectors. We want to promote and encourage innovation and boost exports, which is a real key to enabling small and medium-sized enterprises to prosper, and not just rely on consumption fuelled by public debt.
	The hon. Gentleman rightly highlighted the proud industrial heritage of Barnsley. He was right that it is working hard to continue its transition from the traditional coal mining and glass making industries to new industries such as the low carbon, creative and digital industries. As he rightly highlighted, Barnsley’s potential has been shown by the decision of ASOS to move parts of its operation to Grimethorpe. I believe that it already employs some 500 people and is set to increase that to 1,000, making it Barnsley’s biggest employer. I am happy to put it on the record that that investment is evidence of the council, the business community and the economic development partners working together locally to make the best use of the area’s assets to bring in the long-term jobs that are important for the people of Barnsley.
	As you will know, Madam Deputy Speaker, Barnsley is well positioned to benefit from the growth potential of both the Leeds and Sheffield city regions. That is why we agreed that, sitting where it does, and considering the travel-to-work market areas in which it sits, it should be a full member of both local enterprise partnerships. That underscores the principle behind the partnerships. We have introduced them so that they are founded on real, functional economic areas that actually reflect where businesses trade and people work. Through LEPs, we are encouraging business and civic leaders to come together to provide strong leadership at local level. After all, it will be those local leaders who really understand the barriers that are holding back growth in their area. Our policy is deliberately designed to empower them to set the agenda and work together to both drive sustainable growth and create private sector jobs.
	In the past few months I have visited 18 local enterprise partnerships, including both the Sheffield and Leeds ones. I have to say, I have been immensely impressed by the ambition and capability of the boards and their members.

Mark Prisk: I am not just pleased to acknowledge that, I am actively playing that role now. The Prime Minister is on record as saying that we do not want, as an unintended consequence of our policies to reduce carbon emissions, to somehow export jobs in such industries only to see the net effect on the climate worsened. The hon. Lady is absolutely right about that, and that is why, working with the energy-intensive industries, we have set in train an approach to develop a proper mitigation strategy. In that way we can help the generators of energy who need a carbon floor price without, as an unintended consequence, destroying the industry to which she refers and the brick, ceramic and steel industries. That is one challenge that we need to meet. It is a tricky balance, because some sectors wish to see a new regulatory framework and others do not. We are trying to ensure that we secure one group without destroying the other.
	I mentioned that Barnsley is part of both the Sheffield and Leeds city LEPs. Sheffield city region is focusing on advanced manufacturing and technology, and I am sure that the hon. Member for Barnsley Central will be aware that the advanced manufacturing research centre, based at the university of Sheffield, was recently announced as one of the seven partners in the Government’s first technology and innovation centre. That will focus on high-value manufacturing, and it includes some world-leading businesses such as Rolls-Royce and Boeing. Sheffield city region’s LEP is looking to exploit the potential of the industries to which he referred—creative, digital and low-carbon—in which there are real emerging opportunities. For instance, there are the emerging plans for the Dearne valley eco-vision.
	Let us not forget that both Leeds and Sheffield LEPs have been charged with overseeing the launch of enterprise zones, as announced by the Chancellor. I worked in enterprise zones in the 1980s, and I do not share the hon. Gentleman’s natural scepticism of them. I see the benefit of them. I am not unaware of the danger that if we do not handle them right there can be an unnecessary displacement effect, but we have reformed them to allow the local business and civic leadership to tell us, through the LEP, including the Barnsley team, where they feel the zones should be. That is a critical difference from what we saw in the 1980s, which is so clearly emblazoned on his memory. Then, the zones were imposed from the centre. We are not doing that. We are asking the partnerships, “Where will the zones have the best effect?”
	The enterprise zones will have an important effect. We will notice improvement through the business rates tax breaks, the business-friendly planning rules and the application of superfast broadband, which will kick-start private enterprise locally. The extra business rates that are collected as a result will then be retained and made available to work across the whole local enterprise area. I suspect that one or two businesses will begin to realise that Barnsley, sitting in the middle of two LEPs, is in quite an advantageous position in that context. I also suspect that the hon. Gentleman will fight to ensure that Barnsley remains in that position.
	The Government are working with LEPs and enterprise zones on some potential additional incentives to suit local circumstances. This is particularly relevant in south Yorkshire, because those incentives include consideration of enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing. We are
	also considering tax increment financing to boost the long-term viability of such areas, and ensuring that we provide specific and tailored support for inward investment through UK Trade & Investment. I shall say more about inward investment in a moment, because the hon. Gentleman referred to it a moment ago.
	On Yorkshire Forward assets, and particularly the Barnsley markets project, I fully accept that the forthcoming closure of Yorkshire Forward has left the future of the project open. I also appreciate that the project is key to Barnsley’s ambitions to be, as the hon. Gentleman has said, a 21st century market town. That is why I discussed the future of the markets with a delegation from Barnsley council a few months ago. I said then—and I am happy to say it again now—that we have never, and we will not, plan a fire sale of RDA assets in Barnsley or anywhere else.
	The project is a victim of the economic downturn in recent years, but I understand that there is now a prospect of getting it going again, which is excellent news. The Government want a resolution that enables the project to be completed. We must have one eye on protecting the taxpayer, but local completion for the local economic benefit is firmly in our sights. I must be careful because discussions are ongoing, but let me put on the record that I welcome the positive discussions that the council is having on the future of the markets. My Department is working closely with local partners to see whether we can get that sorted out.
	The hon. Gentleman asked about the regional growth fund. He is right. The first round was incredibly popular, which means that it was, to a degree, oversubscribed. However, I am pleased to tell the House that some 7,628 direct jobs will benefit from that first round, plus a further 2,716 indirect jobs. Most obviously—this is perhaps the most high profile initiative in some media circles—there was £6.4 million funding for Haribo manufacturing plant in Normanton, and a £2 million R and D project under the new David Brown brand, Windserve. Perhaps most relevant to Barnsley is the £18 million programme for the Sheffield city gateway. That will significantly benefit the whole city region, including Barnsley metropolitan borough.
	We are coming to the close of the second round stage—it closes on 1 July—the funding for which is twice that of the first round. Again, there has been a high level of interest. Lord Heseltine gave a briefing this morning for Members of Parliament. I do not know whether the hon. Gentleman had the chance to attend, but if not, he is very welcome to talk to my Parliamentary Private Secretary or to me to ensure that he is fully up to date.
	May I clarify two points that the hon. Gentleman raised? First, LEPs can, and indeed are, bidding as part of that round. Secondly, small and medium-sized enterprises can bid, as I mentioned, through the various project schemes. This is one area in which they are getting together to put together sensible programmes that allow that. The House will understand that it is quite difficult to administer sensibly a £1 billion competitive fund down to sums of hundreds or small thousands of pounds. However, the £1 million limit has been adjusted to allow for projects and programmes, which has meant that a number of encouraging small and medium-sized bids are involved.
	The hon. Gentleman referred to the importance of skills, and he is right. Skills are vital if we are to equip people for the new opportunities that lie ahead. That is why we are doubling to 24 the number of university technology colleges by 2014—to enable more young people to gain the technical skills they need from an early age; it is why we are funding up to 100,000 work experience placements for young people; and it is why we are investing £250 million in a substantial expansion of apprenticeships, which the hon. Gentleman acknowledged, by 75,000 places over the next four years. To help SMEs, a £75 million programme was announced in the plan for growth—support targeted deliberately to help SMEs that want to access advance-level and higher apprenticeships.
	The hon. Gentleman asked whether LEPs should be mandated to drive skills locally. We do not need to mandate that because they are doing it already. One of the great things about the shift from regional development agencies to LEPs is that they allow that local initiative. I was immensely encouraged, certainly in my conversations with the Sheffield city region LEP, that they intend already to bring together their higher and further education college partners and their business partners. They can act as the co-ordinating point, and the nice thing is that we do not have to tell anybody to do that; they are going to do it of their volition.
	The hon. Gentleman talked about the role of SMEs, and I entirely agree with him. They are crucial, whether in the economy of south Yorkshire or across the UK as a whole. As someone who started his business at the bottom of the last recession, I have been determined to ensure that the Government, with the remarkable support from everybody from the Prime Minister downwards, set out a path that will help SMEs start, grow and prosper. That is why we are cutting the corporation tax rates for businesses in Barnsley to 20p; simplifying the tax regime; and reducing the overall corporation tax headline rates, which will put an additional £1 billion in the coffers of business for it to reinvest. That is good for jobs. It is also why we are ensuring that new firms in Barnsley are exempted from national insurance contributions on the first 10 employers and extending the small business rate relief holiday—those rates so penalised smaller businesses trying to survive—for a further year from October; and why we took the decision substantially to expand the threshold for the entrepreneur capital gains tax relief from £2 million under the previous Government to £10 million under this Government. That will send the message that we want not only to cut tax rates to help SMEs start up, but to reward business owners as they develop their businesses. That is a crucial message, and one that was well-received by businesses around the country.
	Those measures are allied to a change in the way we deliver business support in Yorkshire and elsewhere. One of the key changes will be to strengthen how the manufacturing advisory service operates by putting together a £50 million package over the next three years. That outreach service helps SMEs in Barnsley and south Yorkshire, as well as the rest of the country, to improve their productivity, capability and strengths. That is an important shift.
	The hon. Gentleman mentioned trade and the need to ensure not only that people can invest in the area, but that SMEs can expand. I believe that
	Barnsley’s businesses need more help in this field, which is why we have overhauled the former strategy and focused UK Trade & Investment on the future of SMEs and on strengthening their ability to reach new markets; and why we have asked the export credits guarantee department to improve substantially the financial support for exports. That will enable south Yorkshire businesses to apply for the new export enterprise finance guarantee, which will underpin their ability to borrow money to reach new markets. It is also why we have tried to establish simpler trade credit insurance schemes, which are an important way of ensuring that businesses have the confidence to start that process.
	The Government share the hon. Gentleman’s desire to see Barnsley flourish, along with the rest of the
	country. That is why we are going all out to create a business environment that will give companies the confidence to start, invest and grow, and it is why local communities are being freed from central control and mandates. It will enable them to determine their own future, most obviously through their LEP. This, in a way, is the key to achieving long-lasting economic regeneration and sustainable growth in Barnsley and elsewhere. I can assure him and the House that this will continue to have our relentless focus now and in the months and years ahead.
	Question put and agreed to.
	House adjourned.